Investors savaged Intel Corp.'s shares in after market trading after the microprocessor supplier announced fourth quarter results that were strong on a year-over-year basis but which appeared to be below the consensus analysts' estimate.
Intel said its fourth quarter 2007 net income increased 51 percent and revenue rose almost 11 percent from the year-ago.
The company's net income for the three months ended December 29, 2007 rose to $2.27 billion, or 38 cents a share, compared with $1.5 billion, or 26 cents a share in the fourth quarter of 2006.
Intel's revenue climbed to a record $10.7 billion in the quarter, up from $9.7 billion in the comparable quarter of 2006 as shipment of microprocessors surged at the world's No. 1 semiconductor company.
Analysts were on average expecting Intel to post net profit of approximately 40 cents per share. Intel's fourth quarter revenue was also slightly below the $10.84 billion that analysts had estimated the company would report.
Intel said its revenue missed the midpoint of its earlier forecast by $88 million but did not say why.
The Santa Clara, Calif., company's stock price immediately came under pressure in aftermarket trading, dropping almost 14 percent initially as investors pondered the implications of the revenue miss for the high-tech sector.
Intel's 2008 first quarter revenue forecast added to the pressure on its stock price and is likely to be a focus for the market as other chip suppliers announce fourth quarter 20-07 results.
The company said revenue in the ongoing quarter would be between $9.4 billion and $10 billion. Analysts on the other hand were projecting revenue in the range of $9.44 billion to $10.43 billion for the company.
Intel's 2008 outlook also includes capital spending of approximately $5.2 billion and R&D in the region of $5.9 billion. The company said gross margin for 2008 would be approximately 57 percent, compared with 52 percent in 2007.